Wolfspeed is a high-risk, asset-rich SiC turnaround whose AI power opportunity and 200mm operating leverage could drive asymmetric upside, but liquidity and execution remain decisive.
Overview
Wolfspeed is a vertically integrated SiC materials and power-device manufacturer serving EVs, industrial electrification, renewable energy, grid infrastructure, aerospace and defense, and increasingly AI data centers. Its moat comes from proprietary crystal and wafer technology, long four- to eight-year automotive and industrial qualification cycles, a global patent portfolio, and the first pure-play transition to automated 200mm production at Mohawk Valley. **The investment is a distressed turnaround, not a conventional profitable semiconductor compounder.** Q4 FY2026 revenue fell 24.1% year over year to $149.6 million, including a 44.8% Materials decline to $43.3 million and a 10.4% Power Products decline to $106.3 million. GAAP gross margin was negative 25%, adjusted EBITDA was approximately negative $62.4 million, and operating cash flow was negative $54.0 million. Fresh-start accounting reduced D&A by approximately $30 million per quarter, while restructuring delivered $3.7 billion of debt relief and lowered annual interest expense by approximately $62 million. **AI data-center revenue more than doubled in FY2026**, supported by 800V architectures that can raise SiC content to $115,000–$145,000 per MW. At $29.10, the stock trades at 2.61x sales versus a 2.39x historical median; the five-year probability-weighted target is $86.57, but liquidity and utilization remain immediate constraints.